By Fatima Gulzar | September 12, 2026 | Berkshire Hathaway Inc. $BRK.B (-0,33 %)
Greg Abel, CEO of Berkshire Hathaway, explained on September 2 in an interview with Becky Quick of CNBC that there is “much more headwind” against the construction of new data centers in communities across the U.S.
According to Abel, Berkshire’s role in the AI boom centers on providing electricity through Berkshire Hathaway Energy rather than on the direct construction of the facilities. Furthermore, the company will serve large data center customers only on the condition that this does not result in rate increases for existing customers.
The U.S. is currently home to approximately 4,700 data centers, and the headwinds described by Abel have been building for months: New York became the first state to impose a one-year moratorium on the construction of new large-scale data centers; and similar efforts are underway in at least 11 other states. Near major data center hubs, electricity bills have risen by up to 267% over the past five years. Furthermore, data centers now account for 4% to 5% of total U.S. electricity consumption.
Mizuho analyst Vikram Malhotra described data centers as a topic that is likely to shape the political landscape ahead of the upcoming midterm elections. Abel separately emphasized that he views not chips or capital, but rather the capacity of the power grid and lengthy permitting processes as the true bottlenecks in AI expansion. Data centers already account for about 8% of Berkshire Energy’s load in the state of Iowa.
The Bull Case
- Protection Against Headwinds: Berkshire’s involvement could help mitigate the worst effects of these headwinds. Instead of building or owning data centers itself, the company sells electricity through its regulated utility business. Abel’s commitment to prevent rate hikes for existing customers also protects the core business from political pressure.
- Grid Capacity as a Strategic Advantage: Since Abel views grid capacity (rather than chips or capital) as the key long-term bottleneck, this benefits Berkshire’s power generation and infrastructure division. This division stands to gain from rising electricity demand regardless of which specific AI companies prevail in the market.
- Direct AI exposure through the stock portfolio: Berkshire holds significant investments, including a second-quarter increase in its Alphabet position of approximately $24 billion (including a direct placement worth $6.5 billion at a discount). Alphabet expects to invest between $175 billion and $185 billion in AI projects by 2026, which means Berkshire benefits directly from investments in AI infrastructure.
- Local Benefits: Abel highlighted the economic benefits that data centers can bring to communities—such as tax revenue and funding for schools, police, and fire departments in Iowa. Such examples could help allay local concerns and provide arguments in favor of future projects.
The Pessimistic Scenario (Bear Case)
- Growing Opposition: Increasing resistance to data centers could complicate Berkshire’s expansion plans. With electricity bills rising by up to 267% and states like New York imposing construction moratoriums, political pressure looms.
- Limited Growth Due to Customer Protection: Abel’s promise to protect existing customers could limit the growth of Berkshire Energy . While rejecting projects that would require higher rates protects the customer base, it also prevents the company from pursuing lucrative new infrastructure projects.
- Long timelines: It could take years for the rising demand for electricity from AI to translate into significant revenue growth. Site preparation and grid connections are time-consuming; permitting processes and local opposition further prolong these processes.
- Leadership transition: The transition of capital allocation decisions to Greg Abel brings new dynamics. Investors must evaluate the strategy under new leadership rather than relying on Warren Buffett’s decades-long track record, which may increase uncertainty in the short term.
Hedge Fund Activity
Data from Insider Monkey shows that Berkshire Hathaway was held by 135 hedge funds in the second quarter of 2026 (up from 126 in the first quarter). The utility competitor NextEra Energy —also well-positioned to benefit from data center electricity demand—had 80 funds holding its stock (up from 74 in the previous quarter).
Conclusion
Berkshire’s utility operations and its investment in Alphabet offer the company several options to capitalize on the rising demand for AI infrastructure. Nevertheless, growing opposition, lengthy grid development timelines, and the leadership transition could dampen that potential. Investors should watch to see whether Abel succeeds in expanding Berkshire’s energy presence while simultaneously protecting existing customers and maintaining disciplined capital allocation.
